Network virtualization is used to create logical networks that are decoupled from the underlying physical network nodes/devices. These virtual networks, sometimes referred to as “overlays” or “overlay networks,” are comprised of virtual nodes and logical links built on top of an existing physical network. The underlying physical devices in the existing network are responsible for forwarding packets, but the virtual network nodes provide an abstraction that facilitates deployment and management of network services.
Virtual overlay network (network virtualization) technologies have become increasingly important due to the need for segmentation and connectivity of virtual workloads in, for example, data centers. A Virtual Extensible Local Area Network (VxLAN or VXLAN) is an example of a virtual overlay network technology. VXLAN encapsulates Media Access Control (MAC)-based Layer 2 (L2) Ethernet frames within Layer 3 (L3) packets using encapsulation that is similar to the encapsulation used in virtual local area network (VLAN) techniques. More specifically, VXLAN extends the VLAN address space by adding a 24-bit segment identifier (ID) and increasing the number of available IDs to 16 million. The VXLAN segment ID in each frame differentiates individual logical networks so millions of isolated L2 VXLAN networks can co-exist on a common L3 infrastructure. As with VLANs, only host devices (e.g., virtual machines (VMs)) within the same logical network are able to communicate with each other without routing.
Network Virtualization using Generic Routing Encapsulation (NVGRE) is another type of overlay network technology that is similar to VXLAN. NVGRE uses generic routing encapsulation to tunnel L2 packets across an Internet Protocol (IP) fabric.